Australia sues Volkswagen over alleged emissions fraud

Byron Kaye

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SYDNEY (Reuters) - The Australian consumer watchdog on Thursday said it had sued the Australian arm of world No. 2 carmaker Volkswagen AG (VOWG_p.DE) for intentionally selling more than 57,000 vehicles with software which lied about levels of toxic emissions.

"These allegations involve extraordinary conduct of a serious and deliberate nature by a global corporation," Australian Competition and Consumer Commission Chairman Rod Sims said in a statement.

The Federal Court action adds to what is already proving to be costly legal fallout for the German company as it faces class action lawsuits in Australia and around the world over emissions fraud, as well as penalties from antitrust authorities.

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Already in Australia, law firm Maurice Blackburn is seeking more than A$100 million ($75 million) from the company, including the full replacement cost of some 90,0000 vehicles, while the auto giant has agreed to pay its 650 U.S. dealers $1.2 billion in compensation.

In Australia, the ACCC said it wanted the company to make public declarations of misconduct, pay unspecified financial penalties and issue corrective advertising in relation to its actions over five years.

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"Volkswagen engaged in multiple breaches of the Australian consumer law by concealing software in their vehicles to cheat emissions testing and misleading consumers about the vehicles' compliance," Sims said.

"Consumers rightly expect that their vehicle's emissions would operate as advertised during their day-to-day use and we allege that this was not the case."

An employee stands behind the counter at a Volkswagen service center for the German automaker located in the Sydney suburb of Artarmon, Australia, October 7, 2015.

Reuters/David Gray

Volkswagen Group Australia said in a statement that it doubted the ACCC's action would benefit consumers since it planned to give them software which corrected the emissions data as soon as it was approved by the government - likely by year-end.

The Volkswagen unit, which is defending the private class action, said it was reviewing the ACCC's claims.